Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

10. EX.24-13.ALGO (Algorithmic) Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 66,000 units, and current production is 44,300 units.

image text in transcribed
10. EX.24-13.ALGO (Algorithmic) Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 66,000 units, and current production is 44,300 units. Monthly fixed costs are $38,200, and variable costs are $25 per unit. The present selling price is $33 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 15,700 units of the product at $26 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 Reject Order Accept Order Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs: Variable manufacturing rosts ncome (Loss) Having unused capacity available is than the differential cost. Thus, o this decision. The differential revenue is apting this additional business will result in a net That is the minimum price per unit that would produce a positive contribution margin? Round your er to two decimal places. 1.24-14.ALGO (Algorithmic)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions